TOKYO, Dec 22 (Reuters) - Japan's Nikkei average rose to a fresh 7-month high on Wednesday as strength in resource-related shares in the wake of a rally in commodity prices bolstered market sentiment.
The Nikkei started lower as profit-taking kicked in after a 1.5 percent rise the previous day but bargain-hunting slowly emerged, reflecting general bullishness in global equities markets, traders said.
"The Nikkei was undermined by falls in some exporters shares at the start, but at the same time trading houses were strong due to strong rises in commodities prices," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"The market will be cautious about buying too strongly ahead of a market holiday," he added.
By midmorning, the benchmark Nikkei was up 0.2 percent at 10,392.90, after hitting a fresh seven-month high of 10,394.22.
The broader Topix index rose 0.4 percent to 909.38.
Tokyo financial markets will be closed for a public holiday on Thursday.
The Nikkei hovered in a narrow range as the market saw a mixed bag of factors driving the market in thin market conditions with many foreign investors away for the year-end holidays, traders said.
Declines in the euro the previous day due to concerns over debt problems in the euro-zone weighed shares of companies which have close business ties in Europe, such as precision machinery makers. The sector's index fell 0.2 percent.
But trading houses and other resource-related shares advanced after U.S. crude futures rose above $90 per barrel, the highest intraday price in two weeks.
Among trading companies, Marubeni rose 1.9 percent and Mitsui Co Ltd rose 1.4 percent. (Reporting by Antoni Slodkowski and Chikafumi Hodo; Editing by Chris Gallagher)